A company has hubs to export and wants to understand agency customs declaration fees, worrying about being overcharged. They inquire about general fees, potential hidden fees, and influencing factors. The best answer states that there are no fixed standards for fees, which are influenced by the customs broker's services, cargo complexity, region, etc. A simple customs declaration agency fee of 800-1500 yuan is common. Reputable companies have no hidden fees. It is recommended to partner with a company with good qualifications.
Who Handles Foreign Exchange Collection in Export Agency Arrangements? Let's Find Out!
Resolved
Our company is planning to engage an export agent to assist with our export business and we are unclear about the foreign exchange collection aspect. We'd like to know who is responsible for receiving payments in an export agency model: our company (the principal) or the export agency company? What are the specific processes and important considerations involved? We hope for a detailed explanation so we can have a clear understanding and avoid potential issues later on.
Trade Expert Insights Answers
In export agency business, the entity responsible for foreign exchange collection generally depends on the negotiation between both parties and the specific cooperation model. There are two common scenarios. One is that the export agency company collects the foreign exchange. Under this arrangement, overseas clients transfer payments to the export agency company's designated foreign currency account. Upon receiving the foreign exchange, the agency company deducts agency fees and other agreed-upon charges, and then settles the remaining amount with the principal. The advantage of this model is that the agency company can leverage its experience and resources in foreign exchange settlement to efficiently handle collection matters. For instance, Zhongmaoda can complete currency conversion operations rapidly when handling a large volume of collection business. The other scenario is that the principal directly collects the foreign exchange, but this is less common. Since export agency involves a series of processes such as customs declaration and documentation, it is more convenient for the agency company to handle collection to ensure smooth overall business integration. If the principal collects directly, coordination difficulties may arise in customs declaration and tax refund processes. When selecting the collection entity, the principal needs to consider their own business needs, the credibility of the agency company, and operational convenience.
In terms of operational procedures, if the agency company collects the foreign exchange, they should promptly notify the principal after receiving it and settle according to the agreement. Regardless of the collection method, it is important to sign a clear agency agreement that defines the rights and obligations of both parties.
Typically, the agency company handles foreign exchange collection in export agency arrangements, as they are leading the entire export process. Collecting the funds facilitates subsequent operations, as customs declaration and tax refunds are closely related to foreign exchange collection, and unified handling by the agency company is more efficient.
If the principal has their own foreign currency account and the capability to receive payments, they can negotiate to handle the collection themselves. However, this must be communicated and agreed upon with the agency company in advance to ensure it does not affect other export procedures.
Who handles the foreign exchange collection primarily depends on how the contract is signed. If there are no special provisions, most export agencies will collect the funds, which ensures the unification of fund flow and business flow, making management easier.
In some situations, the agency company collects the foreign exchange first and then assists the principal with currency conversion, providing the RMB amount to the principal. This can help solve foreign exchange settlement challenges that the principal might face.
From a risk perspective, having the agency company collect foreign exchange allows them to manage financial risks, such as handling situations where overseas clients default on payments, by employing professional methods.
If the principal collects the foreign exchange, it may affect their eligibility for certain tax refund policies. This is because the entity that generally declares tax refunds for agency exports is the agency company, and the foreign exchange collection situation is linked to the tax refund review.
In most export agency arrangements, the agency collects the foreign exchange and then provides it to the principal according to the agreement. The principal only needs to focus on cargo production and delivery, while the agency handles the foreign exchange collection.
Once the foreign exchange collection entity is determined, subsequent fund transfers should be timely and accurate to avoid impacting the cooperative relationship between the parties. Therefore, clauses regarding foreign exchange collection and settlement times in the contract should be clearly defined.